Introducing the BMO SmartFolio Effortless Investing

This is a sponsored post written by me on behalf of BMO. All opinions are 100% mine.

Well it’s been a while since I’ve written any posts myself on my blog. With the new focus on investing news I’ve been leaving the writing to much more experienced investors. In all honesty I still consider myself a beginner investor.

Recently I was approached regarding Bank of Montreal’s new SmartFolio investment service. Coincidentally I had just opened a BMO business bank account last month. That combined with how unsatisfied I’ve been with the other bank I deal with, I figured it was worth checking out.

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Just launched in January 2016, SmartFolio is a new personalized digital portfolio management service. It is directed at Canadian investors looking for hands-free investing online. You can sign up with as little as $5,000 to invest. This makes it a great option for new investors or those that do not have a lot of time to research and monitor investments. It’s the best of two worlds – a personalized portfolio management service that’s affordable, with digital access when and where they need it.

When you initially sign up you need to complete an investor profile by answering 10 simple questions. Through these questions they can determine how much risk is suitable for your situation. As you go through these questions it actually explains exactly why the question is relevant and how the answer affects your risk tolerance. I’ve done a similar survey with another bank but in that process nothing was really explained and it was a bit confusing. So the BMO questionaire was a refreshing change. Anyone can take the survey for free to get their own portfolio suggestion.

Once you complete all the questions their system presents you with a recommended portfolio based on your answers. These ETF Portfolios have a set proportion of equities and fixed income investments that reflect your risk tolerance. The system is very transparent in explaining exactly what that portfolio would be invested in and why. If you’re still not sure they push you to call to speak to a BMO expert about your risk tolerance and the recommended portfolio. Either way if you decide to proceed with an application, a registered representative will review your application to ensure it does suit the portfolio chosen.

SmartFolio offers 5 model ETF portfolios managed by BMO experts to suit all levels of risk tolerance and investing goals. The more risk you are comfortable with, the greater the percentage of equities. Within each portfolio there is a broad range or cost efficient ETFs to provide a solid level of diversification. This is a much smarter approach than other banks that simply push you to put all your money into a single mutual fund. On top of that it’s the mutual fund which pays that advisor the highest commission that they usually recommend. With SmartFolio there is none of that bias or reps just looking to maximize commission.

As markets are constantly changing, BMO has expert portfolio managers monitoring each model ETF portfolio on a daily basis. When they feel it’s necessary, they will rebalance the portfolio so that it always matches clients’ investment objectives. You don’t have to worry about trying to shift your portfolio yourself if market conditions change. They handle all of that for you to keep your money safe and to keep your investment goals intact.

Overall I was quite impressed with the BMO SmartFolio. While I’ve focused on stocks and some index funds so far, I think it would make sense to add some more security to my investment approach. Based on the survey I do have a high risk tolerance but I unfortunately don’t have enough free time to properly manage my own investments. This may be a pretty good fit for me. For now I’m submitting the application and will put a small amount into that account as a bit of a test. If all goes well I’ll pump some more money into it to further balance out my overall portfolio.

A more active investor would still likely want to manage their full portfolio on their own, but then you have to be careful with all the fees associated with trying to keep your account properly balanced. Personally I just don’t have time to manage that on my own. Nor do I have the expertise to know when to rebalance.

If you’re a Canadian investor looking for effortless investing, I highly recommend you check out the BMO SmartFolio.

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